MG106 Strategic Management
London School of Economics and Political Science
July 2, 2025
VS
1️⃣ What is Uber’s innovation?
2️⃣ Do you agree with the use of a surge pricing model?
3️⃣ Is advanced booking inefficient in ride-hailing?
4️⃣ Why couldn’t Uber implement its model in China?
Framework: Business Models → Platform Strategy → Implementation
Task: 10 minutes to discuss traditional taxi pain points 🚕
Uncertainty & Risk 😰
System Failures 🚫
How does technology solve these problems?
| Traditional Taxi | Uber |
|---|---|
| WHO: Taxi companies | WHO: Platform connecting two sides |
| WHAT: Transportation service | WHAT: Real-time matching + trust |
| HOW: Own cars, employ drivers | HOW: App, algorithms, ratings |
Key Insight: Uber owns no cars, employs no drivers
Yet controls the entire experience 🎯
Which creates more value for customers?
The Mechanism:
| Scenario | Multiplier | $20 ride becomes… |
|---|---|---|
| Light rain | 1.5x | $30 |
| Concert ending | 2.5x | $50 |
| New Year’s Eve | 10x 😱 | $200 |
Economic efficiency or price gouging?
What Happened:
Discussion Points:
Is transparency enough? | Should there be caps? | Who benefits?
Uber Says NO ❌
Didi Says YES ✅
Key Question: Is this about efficiency or market understanding? 🤔
Global Advantages 🌍
But in China… 🚧
Technology ≠ Automatic success
Product Adaptations:
Strategic Backing:
Alibaba 💰 + Tencent 💬 = Ecosystem advantage
Later: Even Apple invested $1B 🍎
Innovation isn’t enough 💡
Platform competition intense 🥊
The Bottom Line:
Great strategy + Poor implementation = Failure
Next: How do companies close this gap? 🌉
Read: Ryanair (A) and (B)
Questions to consider:
Focus: Strategy execution and competitive dynamics ✈️